100 GM Dealerships Will Be Reinstated


General Motors chairman and interim CEO Ed Whitacre confirmed that approximately 100 dealers whose franchises were terminated during the automaker's bankruptcy would be reinstated.

"I think that's a given," said Whitacre, saying the actual number may even be "in the hundreds." The reinstatement may be a small percentage of the 1350 dealers rejected through GM's bankruptcy proceedings. Dealers not reinstated likely will be closed by the end of the year.

The reinstatement largely comes thanks to a new law signed by President Barack Obama that calls for rejected dealers to appeal the termination through an independent arbitrator. If a dealer decides to move forward, it must submit notice by January 25. The arbitration process may be somewhat expedited, as judgments will be rendered by June 15.

Whitacre expressed some reservations about the process. While he concedes GM did make some mistakes when trimming the dealer network, the arbitration process could possibly reinstate some lousy dealerships.

"The bad thing would be if they're a lousy dealer that has a lousy storefront and through some process they're put back in arbitrarily," said Whitacre. "If they're a good dealer and would really push GM in a classy manner, like we want it done, then it would be really good."

Source: Automotive News

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